Clarification on 0% purchases

cerrebro

I've just got a credit card with 14 months 0% interest on purchases.

Am I right in thinking that if I spend say £800 in a month, then don't use it again and pay it off at £200 a month. I won't be charged any interest?

Gilbo_Baggins

That's correct..

moneysavinggirl40

yes you're right, brilliant isn't it?

jamesd

Yes. To maximise the benefit you should really make only minimum payments and put the extra money into an account that pays you interest until a week or so before the end of the 0% time.

grumbler

EDIT: cross-post
You can do better and make ~£15 in interest if instead you pay just a little more than minimum payments, add money to a saving account paying ~2.5% (net) and then pay the CC off at the end of 14 months.

forgotmyname

Making minimum payments maybe best if your getting interest on anything over that you saved instead. But its been mentioned that making minimum payments may go against you if you need to apply for more credit.

So I would pay a bit extra over the minimum. I guess just paying £5 or £10 over should clear that?

How much can you make in 14 months from £800 though?

YorkshireBoy

forgotmyname wrote: »

How much can you make in 14 months from £800 though?

£35.17 net of BR tax.

shortcrust

About a year ago I stopped paying more than the minimum on my promotional rate accounts and it doesn't seem to have done any harm to my credit worthiness. After all, prospective lenders can see there's a promotional rate on the account.

grumbler

shortcrust wrote: »

.... it doesn't seem to have done any harm to my credit worthiness...

Nobody says that the effect can be huge, and you simply don't have enough information to notice a small difference.

kna

I was scouring the forum to find the answer to this exact question myself but the responses seemed to contradict the way it's worded in the T&C's. Whilst I absolutely trust the advice here I just want to clarify when say, Tesco, put this in their summary box:

Interest Free Period: Maximum 51 days for purchases if you pay your balance in full and on time and have paid the previous months balance in full and on time.

You will not pay interest on new purchases if you pay your balance in full and on time.

They mean this applies to normal purchases after your 19-Month interest free period, and until then I can happily rack up purchases and pay nothing but the minimum until the period is about to come up? (Not that I would, but just as an example).

grumbler

What exactly contradiction have you found?
Up to 51 days interest free on purchases (if you meet certain conditions) is a universal benefit.
During the first 19 months more beneficial introductory 0% makes it irrelevant.
Yes, making minimum payments in time will be sufficient.